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Preview — A Random Walk Down Wall Street; Including a Life-Cycle Guide to Personal Investing by Burton G. Malkiel
A Random Walk Down Wall Street; Including a Life-Cycle Guide to Personal Investing
This gimmick-free, irreverent, and vastly informative guideâ��with over half a million copies soldâ��shows how to navigate the turbulence on Wall Street and beat the pros at their own game.Skilled at puncturing financial bubbles and other delusions of the Wall Street crowd, Burton Malkiel shows why a broad portfolio of stocks selected at random will match the performance ...more
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For the statistically interested, the problem with a lo ...more
It's hard to work in Silicon Valley without being affected by Wall Street. When I started working I was interested in technology, not business and finance. Business and finance seemed a bit beneath me. (Actually, technology seemed a bit beneath me too. I was kind of a snot ...more
The first thing I noticed is that Malkiel is a surprisingly gifted writer. He is capable of telling a good story, he's cultured enough to make interesting references, and he has that quintessential skill of all popular writers: the ability to present ideas clearly without dumbing them down. For someone in my p ...more
This is a nice sum-up of the EMH and MPT. The author explains why fundamental stock analysis cannot beat the market, therefore the best way to invest is to buy an index fund. He started with the major financial bubbles and concluded that the stock market is very unpredictable and even the brightest mind cannot foresee the bubbles. He went on to explain why the market is very efficient, behavior finance, and why most fund managers cannot beat the market. He then analyzed different asset ...more
-The "Firm Foundation Theory" or fundamentals of stock picking are based on the following:
1.)the expected growth rate
2.)the expected dividend payout
3.)the degree of risk
4.)the level of market interest rates
BUT, the two caveats are 1)expectations about the future cannot be proven in the present (hence the title of this book) and, 2.) precise figures cannot be calculated from under ...more
The book begins with a fairly boring recount of seve ...more
Scanning some of the reviews I deduce that people like this book if they believe in index investing and don't if they don't. I feel Malkiel's argument is very convincing partly because he demystifies a lot of what financial professionals do. For example, I have always wondered, when they tell you "if you do this you c ...more
The writing is simple enough to understand for most budding investors, yet at the same time it appealed to the inner nerd from my ...more
First, Mutual funds are managed and rarely outperform the market. For this lack of performance, you get to give away a percentage each ...more
Remember that scene from The Graduate? Well, don't invest in plastics. Invest in Index Funds. Simple.
"It is impossible to consistently out-perform the market as a whole. Most investors would be best served by just invested in a market index."
If you dispute that premise then he does a good job of demonstrating its truth, with plenty of good data and examples. If you are like me, and fully buy into that premise already, then the bulk of the book will be skimmed through, occasionally ...more
Being a conservative investor myself, this book resonated with me. It was reinforcement. But the book recognizes that not everyone has that view and basically says, "if you're going to pick individual stocks, here are some ways to minimize your risk" or "put most of your money in index funds, and use 5% to gamble with."
The overwhelming theme, though, is to inves ...more
Overall, the book was written very well and very accessibly ...more
While I didn't need convincing on the central points of the book, I do think he sometimes undermined the strength of his arguments by making suggesti ...more
The record of professionals does not suggest that sufficient predictability exists in the stock market or that there are enough recognizable irrationalities to produce exploitable opportunities to earn...more
My biggest issue is that his cause for the Efficient Market Theory is that the market adapts ...more
The strategy: diversify among asset-classes. For stocks, use unmanaged, inexpensive market index funds. Buy-and-hold, the longer the better. Want more return? Risk more loss.
Technical analysis gets a voodoo reputation because it _is_ voodoo. It's scientism. It flows from misunderstandings of probability in human-intuition, and the human cogn ...more